Total Recall

It’s the news that no food company wants to hear: There’s a problem with a product, serious enough to warrant a potential recall. In recent years, a number of companies have been caught flat-footed by this very situation. Among the high-profile examples have been E. coli 0157:H5 in fresh spinach and in hamburger, salmonella in peanuts and a recall of 36 million pounds of fresh and frozen turkey also because of suspected contamination with salmonella.

In 2010, concerns about food safety prompted Congress to pass the Food Safety and Modernization Act (FSMA), the first major overhaul to food safety regulations in 70 years. As Food and Drug Commissioner Margaret Hamburg noted at the time, FSMA provides the FDA with “the critical foundation for a prevention-based, 21st-century food safety system.”

Although concerns about the cost of the law have delayed issuance of the final rules for FSMA, the act is beginning to set the stage for more recalls. Under FSMA, FDA has increased its regulatory authority, including the ability to mandate food recalls for the first time. The law also institutes new hazard analysis and preventive control requirements. It increases the frequency of inspections and other scrutiny.

Coupled with the Reportable Food Registry launched in 2009, this tougher regulatory framework is already producing more inspections of food and beverage companies that have led to warning letters and recalls. Savvy companies are proactively reviewing their good manufacturing processes, record-keeping and procedures to ensure everything is buttoned up.

Under the Reportable Food Registry, the onus to report a problem rests with the companies. Once a problem has been detected that has a reasonable probability of causing serious adverse health consequences to humans or animals, companies have just 24 hours to report the issue to FDA via the on-line Re-portable Food Registry. Federal, state and lo-cal government of-ficials may also re-port this information to others, in-cluding to the public and the media – another reason companies need to be very proactive.

The Best Defense

The public health implications of a recall are, of course, potentially serious. So is the damage to a company’s reputation. Recalls can erode consumer confidence in the brand – and can result in huge legal problems and devastating financial fallout. Following the Class I recall of its products, which tested positive for salmonella, The Peanut Corporation of America filed for Chapter 7 bankruptcy in 2009.

That’s why the smartest companies know the value of implementing good manufacturing processes and traceability – before a problem occurs. Being able to document company compliance and show verification of suppliers is important, and it can sometimes help sidestep a recall. In 2010, that’s what happened to at least one food company that used the flavor enhancer hydrolyzed vegetable protein (HVP) as an ingredient. When its HVP supplier reported salmonella contamination to the FDA via the Reportable Food Registry, many products from many companies had to be recalled, although no illnesses linked to the contamination were ever reported. This company was able to avoid the recall. How? It had clear documentation showing a validated “kill step” for salmonella in its manufacturing process.

Prepare for the Worst

Despite the best efforts, recalls can sometimes happen, which is the reason that all companies need to prepare for the worst. Companies that have written recall plans – including clear chain of command for decision-making and comm­unications – are able to respond more quickly and effectively. Mock recall drills not only train teams to work together, but also help identify any gaps in the recall plan.

The best-prepared companies assign members and coordinators to communicate internally and externally to the FDA and other regulators as well as to customers and consumers. These companies are also aware of the scope of their insurance coverage and are prepared to give notice to their insurers of a potential recall when appropriate. It’s also important to refresh the plan regularly and continue training the team, especially if there is staff turnover in key leadership.

Communicate Strategically

When a recall occurs, it’s important to conduct a timely and diligent investigation. Given the 24-hour reporting requirement by the FDA, it’s likely that companies will need to act on incomplete – and imperfect – information.

For a Class I recall, which involves a health hazard in which there is a reasonable probability that the food will cause health problems or death, FDA strongly recommends direct-to-consumer communication to alert consum­ers to rid their pantries of the affected products. This generally means sending a press release to the Associated Press and other news organizations with large audiences. Although such press releases are technically voluntary, FDA may issue its own if a company does not.

The company will want to be straightforward in such communications, stating the facts clearly and in a way that is not alarming. These direct-to-consumer communications are in add­ition to communications with a company’s distributors, wholesalers and re­tailers, which must direct those entities to remove the recalled products from the chain of commerce.

More proactive outreach is also necessary to protect the company’s reputation and to show compassion and care. The CEO and others will likely need to be visible to provide the facts as they are known and to assure the public that the company is getting to the bottom of the situation – that it is taking the steps to fix it and it is doing everything possible to be sure it never happens again.

Some of the same steps might be required for Class II and Class III recalls. These are less serious recalls, so they might not present the same public relations and litigation risks as Class I recalls, but they can still affect business and reputation. Technically, these recalls do not need to be announced to the general public, but because they are listed in FDA’s Enforcement Reports and posted on FDA’s website, they are likely to become public. It is better to be prepared to respond as needed.

Communications to business partners are especially important. Compa-nies should clearly state the reason for the recall, its scope and other information needed to make it easy for those partners to remove the affected products from commerce.

Now is the time to ensure not only that your company is following best practices to minimize risks that can lead to recalls, but also that it is prepared to handle the logistical and communications issues that might arise if a recall must occur. So prepared, a company can minimize damage to its brands, its relationships with customers and consumers, and to its bottom line.